SBA’s Paycheck Protection Program Loan Review Processes

The Office of Inspector General (OIG) conducted this evaluation to assess the U.S. Small Business Administration’s (SBA) processes for reviewing Paycheck Protection Program (PPP) loans for eligibility and forgiveness.

SBA’s online loan forgiveness platform used by lenders to submit forgiveness requests is adequate to support SBA’s loan review process. However, we found that for some loans, totaling $66.4 billion, SBA did not meet the 90-day statutory requirement to remit forgiveness payments to lenders. SBA did not meet the 90-day requirement for 98.2 percent of loans over $2 million. Not completing reviews of loans and remitting payment promptly creates uncertainty for borrowers and PPP lenders who are unsure if SBA will forgive their loans.

We also identified other matters that SBA should address, including how SBA made changes to allow certain loans to be reviewed for fraud and eligibility after they have been forgiven. We have concerns about the effects these changes will have on SBA’s ability to recover funds for forgiven loans later determined to be ineligible. Outstanding loan forgiveness applications are a potential indicator of fraud. Borrowers who fraudulently obtained a PPP loan are unlikely to apply for loan forgiveness. We identified 1.9 million loans totaling $177.3 billion with no forgiveness application as of May 2021.

We recommended that SBA develop a plan to ensure remaining forgiveness reviews and remittances are completed within 90 days as required by the Coronavirus Aid, Relief, and Economic Security Act. SBA management agreed with the report finding and recommendation.